PPATK Chief Speaks Out on Article 50A of the P2SK Law and Money Laundering Concerns

The Head of the Financial Transaction Reports and Analysis Centre (PPATK), Ivan Yustiavandana, has confirmed that efforts to eradicate money laundering crimes will not be disrupted by the provisions of Article 50A of the Financial Sector Development and Strengthening Law (UU P2SK). Article 50A has drawn particular public attention due to a clause providing legal protection for transactions or purchases of special debt securities by the Danantara Investment Management Agency (BPI), whether in the form of patriot bonds or merah putih bonds. Paragraph 5 of Article 50A of the UU P2SK states: ‘the state guarantees and protects the purchase of special debt securities instruments as referred to in paragraph (a) from general criminal prosecution, special criminal prosecution including tax crimes, and from civil lawsuits.’ Furthermore, paragraph 6 states that data and information from the purchase of debt securities issued by BPI Danantara cannot be used as a basis for tax imposition and cannot be used as legal evidence in court. ‘The integrity of Indonesia’s financial system and efforts to prevent and eradicate money laundering are ensured to be upheld, implemented, and unaffected by the existence of Article 50A,’ Ivan told CNBC Indonesia on Friday. Ivan emphasised that in practice, PPATK’s efforts to uphold the international standards on Anti Money Laundering, Countering the Financing of Terrorism, and Countering the Financing of Proliferation of Weapons of Mass Destruction (AML-CFT-CPF) outlined by the Financial Action Task Force (FATF) will continue to be carried out by Indonesia, given that the country achieved full membership in FATF in 2023. ‘God willing, Indonesia’s membership in FATF will always ensure that Indonesia remains committed to upholding the highest basic principles of international AML-CFT-CPF standards issued by FATF,’ Ivan stressed. Previously, Coordinating Minister for Economic Affairs Airlangga Hartarto also denied that the purchase of special debt securities issued by Danantara, namely the Merah Putih Bond, constitutes a money laundering practice due to Article 50A of the UU P2SK. ‘Of course, if we have an investment, that is not part of money laundering, so the instrument is not for money laundering,’ Airlangga said when met by reporters at his office on Wednesday. He added that the new policy does not undermine global trust in Indonesia as a member of the Financial Action Task Force (FATF), a global organisation combating money laundering practices. ‘We are still a member of FATF, and the new instrument is also not a medium for money laundering practices,’ he asserted. Therefore, Airlangga explained that the issuance of the new investment product from Danantara cannot be linked to money laundering. ‘New products always use mechanisms and transparency that are not related to money laundering or matters related to financial crimes,’ he said.